On a chilly Monday morning in January, Seattle awoke to the news that one of its most promising companies, Juno Therapeutics, reached a deal to be acquired by biotech giant Celgene for $9 billion.
In less than a month, Seattle saw two more deals: Seattle Genetics bought Cascadian Therapeutics for $614 million and Universal Cells was acquired by Japanese company Astellas Pharma for $100 million.
The sudden streak of biotech acquisitions may worry some who remember Seattle’s difficult history with such deals. But it also points to another trend: Seattle is a global hub for cell therapy technology, which is quickly becoming the hottest trend in biotech. Juno and Unviersal Cells are at the cutting edge of cell therapy technology and even Cascadian’s tech is related to cell therapy science.
Cell therapies have achieved buzzword status in biotech akin to virtual reality or “smart” technologies in the tech industry, but that wasn’t always the case. The rise of cell therapies, and the big-dollar deals that come along with it, is relatively recent.
Cell therapies use living cells, notably immune cells and stem cells, to treat diseases or even regenerate tissue. Dr. Stan Riddell, a longtime cell therapy researcher and scientific director of the Immunotherapy Integrated Research Center at Seattle’s Fred Hutchinson Cancer Research Center, said the first successful cell therapy was bone marrow transplant for leukemia patients.
“In fact bone marrow transplant was important in identifying the role of immune cells in antitumor responses, knowledge that led to efforts to use T cells and other immune cells to treat cancer,” Riddell told GeekWire in an email interview.
Juno is taking advantage of that knowledge today. The company is one of the leading CAR T immunotherapy players in the country, developing cancer treatments based on genetically altered T cell technology from Fred Hutch, Seattle Children’s Research Institute and others.
Cascadian Therapeutics’ cancer treatment bucks the immunotherapy trend in Seattle — it relies on antibodies, not cell therapies, similar to many of Seattle Genetics’ treatments. The technology is related to cell therapy and relies on many of the same underlying biotechnology principals.
“Cell therapies are also being developed to treat viral infections and for regenerative medicine applications,” Riddell said. Universal Cells’ stem cell technology could be used for regenerative medicine or a number of treatments.
The science behind advanced cell therapies has been mounting for the past decade — but only in the past few years have investors and the wider biotech market really begun to take notice.
“If you look around the country and you see what’s happening in cell therapy — it’s taking off,” Leslie Alexandre, the CEO of industry advocacy group Life Sciences Washington, told GeekWire. “And the reason it’s taking off is because we’re seeing, with increased frequency, clinical validation of the efficacy of this new set of breakthrough therapies,” she said.
Those validations include the first CAR T immunotherapies to be approved by the FDA, just a few months ago. The maker of one of those therapies, Juno competitor Kite Pharma, was acquired for $11.9 billion last year.
“Everyone’s been poking at this problem for a while now,” said Rob Carlson, a longtime scientist and managing director at biotech investment firm Bioeconomy Capital.
He pointed to world-class research on the immune system and stem cells happening at the University of Washington and other Seattle research powerhouses. “It just means there’s a lot of expertise in the neighborhood. And many of those people decide to start companies at some point, and now that’s paying off,” Carlson said.
But as treatments move from basic science to commercialization, Seattle falters. In contrast to other health hubs like Boston, Seattle doesn’t have the commercialization chops to match its research.
“Our ecosystem is big research, medium development and small on the commercialization side, and our talent pool reflects that,” Alexandre said. “So we’re outstanding in getting things approved by FDA, and that is no small task. I think that once these companies get through FDA approval, but have not built up scale-size manufacturing,” an acquisition by a larger biotech company with commercialization resources makes a lot of sense, she said.
Seattle has struggled to retain large biotech companies in the past decades. A particularly sore spot was the shuttering of Amgen’s giant waterfront campus in 2014, which it acquired when it bought Seattle biotech Immunex in 2001. The Amgen facility employed 660 when it was closed, and it will soon house Bellevue, Wash.-based Expedia’s new headquarters.
Juno’s acquisition has raised fears that the same could happen again to another rising biotech star, although the company has repeatedly declared that it intends to stay in its brand new Seattle HQ and its Bothell, Wash., manufacturing facility.
Carlson said acquisitions always come with risks, but also that the deals will be good news for Seattle’s starutp scene.
“If you look at the churn of startups in Silicon Valley in other industries over the years, this is exactly how new startups get going,” he said. “There’s an acquisition and people stick with it as long as they need to to make sure that they see all the benefits from the acquisition, and then they leave and start a new thing. So in the longer term, I think it’s extremely beneficial for Seattle.”
A bigger challenge for the industry, Carlson said, is manufacturing. Most cell therapies are in the very early stages of research and clinical development. Once treatments like CAR T immunotherapy hit the market and things like regenerative medicine ramp up, creating and managing the cells all those procedures need will be a huge challenge.
“The analogy would be basically to printers and ink,” especially in regenerative medicine, Carlson said. The science and infrastructure behind treatments are the printers and the cells that make it work are the ink. “One of the hiccups that’s going to come in the industry is people have focused so hard on showing that the ink works, they haven’t really grappled with making sure there’s going to be a high-volume supply of high-quality ink.”
More than just capacity, current manufacturing is incredibly expensive.
“Let’s say we knew how to print the kidney,” Carlson said, “which we don’t. But let’s say we did. Then, at the current cost per cell for most cell types, that’s somewhere between 10 [million] and $20 million worth of cells. So that tells you that the economics of the therapy are a long way from matching up with whatever the actual therapeutic value of the treatment is.”
